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WallStreetBets vs WallStreet: It's not about the money anymore

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Re: WallStreetBets vs WallStreet: It's not about the money anymore

#31

Post by segmondy »

ericmay wrote: post #10
waylandsmithers wrote: post #4

I don't know- there must be institutional players on the long side by now right? Either way, _eventually_ someone will be left holding the bag when the stock comes back down to earth.

Retail traders are literally locked out of buying new shares... they were a scapegoat the whole time. $GME is up 11% as of the writing of this post. Who is buying it? This is actually making me angry to watch. -edit- I had like one share - Robinhood just sold my shares without me ordering it. Dunno what happened there.

hedge funds that shorted have to buy to close out their position, they need to buy.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#32

Post by spyspy »

jonplackett wrote: post #6

I’m seeing so much news about this but don’t understand what’s happening. Can someone do a recap?

Users on r/WallStreetBets have rallied around buying stocks, like GameStop ($GME), that are heavily shorted by the market (generally by larger trading firms). This buying has driven the stock prices up very very quickly, because of the buying itself and other knock-on market forces (google: gamma traps, short squeezes). The players that were short have thus lost a lot of money on their bets. r/WSB has taken a lot of pride in this and using it as a rallying cry to keep buying. It's mostly bs - everyone just wants to get rich - but it's effective and making headlines.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#33

Post by willis936 »

Beefin wrote: post #9

People have had enough, it's not just WSB anymore. The community of retail investors in GME is far beyond WSB. It's people that are frustrated with the 1% getting bailed out time and time again and them not seeing a dime at their tax dollar expense.

Occupy Wall Street was just 10 years ago. It was the longest demonstration in a lifetime. Nothing changed. How did nothing change? What message does this send?

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#34

Post by dragontamer »

itake wrote: post #26
waylandsmithers wrote: post #4

I don't know- there must be institutional players on the long side by now right? Either way, _eventually_ someone will be left holding the bag when the stock comes back down to earth.

My understanding is retail investors are buying stock now at $200/share, with the expectation that institutional players will be forced to buy it back at +$200/share to cover their shorts. This will leave the original holders of the shares (the ppl the shorters borrow the money from) with a stock worth less than $200, but maybe more than their original purchase. If the retail investors don't "get out", then definitel…

Current price is $400 actually. Seems to be a very fast moving stock however, it probably will be dramatically different in price by the time someone reads my post.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#36

Post by itake »

dragontamer wrote: post #23
ericmay wrote: post #10

Earlier quoted context omitted.

Retail traders are literally locked out of buying new shares... they were a scapegoat the whole time. $GME is up 11% as of the writing of this post. Who is buying it? This is actually making me angry to watch. -edit- I had like one share - Robinhood just sold my shares without me ordering it. Dunno what happened there.

I just checked my TD Ameritrade account. I'm able to buy GME just fine (though I didn't hit the "confirm" button). I know RobinHood messed up here. But... they never had a good reputation to begin with. Its an open secret that RobinHood's entire setup is kind of crap.

I didn't see a failure on Schwab until I hit "confirm" yesterday.

My understanding is TD Ameritrade is only blocking the purchase of stock on margin. If you have the cash, you're allowed to make the purchase.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#37

Post by chaganated »

Premature gloating. The government can always come in at the last minute with bailouts for wall street and overblown charges against the redditors.

I see that you've been HODLing some GME. Sorry bro, have to charge you with economic terrorism. Nothing personal.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#38

Post by hourislate »

waylandsmithers wrote: post #4

I don't know- there must be institutional players on the long side by now right? Either way, _eventually_ someone will be left holding the bag when the stock comes back down to earth.

From what I understand, BlackRock has a long stake.

https://www.sec.gov/Archives/edgar/data/1326380/000083423721...

>BlackRock Inc. trimmed its holdings in Gamestop, Inc. (NYSE:GME) by 18.23% during the 4th quarter, according to the company in its most recent Form 13G/A filing with the SEC. The firm now owns 9,217,335 shares of GME, which represents 13.20% ownership.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#39

Post by jsjsbdkj »

tenaciousDaniel wrote: post #8

As someone who is not very educated in finance, I'm curious how to interpret today's events. Is nasdaq/robinhood/everyone else transparently manipulating the market on behalf of hedge funds? Or are these standard mechanisms in place for preventing the stock market from swinging wildly out of control? I don't know if it's standard to completely block trading on one or more stocks.

WSB has basically recreated a "boiler room", which is an ages old scam where a small group of insiders would encourage people to buy stock, drive them value up, and then the insiders dump the stock. The key insight here is that for every person selling the stock and making millions, somoene has to be buying. There's a narrative about short squeezes forcing a small number of hedge funds to buy stock, but in practice many of the people buying the stock at the inflated price are retail investors hoping to get rich quick. A few retail investors will get rich quick, but that money will come from the people who join the party late and can't get out before the price drops back to earth.

The trading stops and laws that exist to prevent this kind of wild volatility are basically because for 90% of people, this is not good. By the time your parents read about this in the paper and log into their TD Ameritrade accounts to "invest", they'll be in that group of people left holding the bag.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#40

Post by joss82 »

jonplackett wrote: post #6

I’m seeing so much news about this but don’t understand what’s happening. Can someone do a recap?

It's quite simple really:

1. Big hedge fund bet against GameStop stock (shorted up to 140% of the stock, it's called naked short and everybody thought it was illegal since 2008 but that's another story)

2. Lot of small-to-medium investors coordinated over Reddit to take the opposite "bet" en masse (basically buying a lot of GameStop shares) so that the price will go up and "big hedge fund" lose a lot of money.

=> The plan worked. It's a first. Hence the news coverage.

Edit: Typos and formatting

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